COVID-19 Prevention Protocols

The state has issued industry-specific guidance for businesses, including guidelines to create a safer environment for workers and customers/clients in the real estate industry.

As part of this state guidance, real estate practitioners are to establish a written COVID-19 prevention plan to be followed by agents who show properties. This Shown Properties Specific Plan needs to be displayed at the entrance of the property with a set of rules for agents and home viewers that are to be a condition of entry.

Tri-Counties has established a set of checklist templates for agent use based on this new guidance. Please note that any and all information on the forms does not, and is not intended to, constitute legal advice. For specific legal questions, please contact the C.A.R. Legal Hotline at 213-739-8282.

REALTOR® Guidelines on Best Practices During COVID-19

C.A.R. has developed new Best Practices Guidelines for Real Estate During COVID-19 in response to the COVID-19 Industry Guidance for Real Estate Transactions issued earlier this month by the California Departments of Public Health and Industrial Relations. The Industry Guidance document details physical distancing and cleaning/disinfecting practices REALTORS® must follow when showing properties as California enters stage 2 of reopening. Since the release of this document, C.A.R. has worked closely with these agencies to interpret and revise some of the restrictions in order to make them more manageable, while still focusing on the health and safety of our members, their clients and the community.

C.A.R.’s updated best practices guidelines are available here and will be available in zipForm® next week. We urge you to read these guidelines carefully and to implement them at all times when showing properties. Always defer to the rules governing your local area, as cities and counties may have more stringent restrictions on real estate activity.

Code of Ethics and COVID-19

The Association is concerned that members may be taking steps that may unknowingly lead to liability down the road. In this article, to help avoid these liability concerns, we return to the basics and revisit the NAR Code of Ethics (COE) and highlight those COE sections that need to be reviewed as part of your risk management strategy.

Mortgage Forbearance: Borrowers of government-backed mortgages can request up to 360-day payment forbearance without proof of hardship, and no additional fees, interest, or penalties can be assessed for the forbearance.

Owners of multifamily properties who were current on their mortgage payments as of February 1st and have a federally insured, assisted, or supplemented loan may request forbearance for 30 days due to financial hardship, with extensions of up to a total of 90 days. Borrowers receiving the forbearance may not evict or charge late fees to tenants for the duration of the forbearance period.

Moratorium on eviction filings, or fees or penalties for tenants for nonpayment of rent for 120 days on properties insured, guaranteed, supplemented, protected, or assisted in any way by HUD, etc.

Order prohibits landlords from evicting tenants for nonpayment of rent and prohibits enforcement of evictions by law enforcement or courts.

Requires tenants to declare in writing, no more than seven (7) days after the rent comes due, that the tenant cannot pay all or part of their rent due to COVID-19. The tenant is required to retain documentation but not required to submit it to the landlord in advance. The tenant remains obligated to repay full rent in a timely manner and could still face eviction after the enforcement moratorium is lifted.

Many local jurisdictions have more stringent and/or lengthier timeframes that can be found via the California Apartment Association’s COVID-19 Tenant Protections page.

Coronavirus Rent Payment Delay and Repayment Agreement
(C.A.R. Form RPD, 4/20)
Addendum to a residential lease or rental agreement that, when agreed to and signed by the landlord and tenant, documents the tenant’s claim that the tenant is unable to pay rent and the reason for the inability; proof of the inability to pay; the amount of the rent not being paid; and a plan to pay it in the future.

Coronavirus Aid, Relief, and Economic Security (CARES) Act

The $2 trillion COVID-19 economic relief package signed into law on March 27, 2020 provides financial assistance to families, small businesses, and individuals who are self-employed and independent contractors. A key provision creates a temporary Pandemic Unemployment Assistance program that extends unemployment benefits to those not traditionally eligible, including self-employed individuals.

Pandemic Unemployment Assistance (PUA)

The unemployment assistance is available to individuals who are unemployed, partially unemployed, or unable to work for the weeks impacted as a result of COVID-19 between January 27 and December 31, 2020. This excludes individuals who have an ability to telework with pay or individuals who are receiving sick leave or other paid leave benefits. There is a maximum of thirty-nine (39) weeks of assistance, where the amount is equal to what is authorized under the state unemployment compensation law, plus an additional $600 per week for up to four (4) months.

Small Business Administration (SBA) Programs and Provisions

The CARES Act dramatically increased the role of the SBA in efforts to assist U.S. businesses impacted by the COVID-19 crisis. The two main vehicles for these relief efforts are the SBA 7(b)(2) loans -Economic Injury Disaster Loans - and the SBA 7(a) loan program. Both loans are available to businesses with 500 or fewer employees that have been negatively impacted by the crisis.

Most agents are likely to be eligible for loans that are being made available through the SBA. The CARES Act makes the following options available to REALTORS® (hyperlinked loan programs):

The SBA has announced that lenders may begin processing loan applications as soon as April 3, 2020 for small businesses and April 10, 2020 for independent contractors and the self-employed. The SBA will loan borrowers up to $10 million and the actual loan size independent contractors receive will be determined by a formula based on average total monthly income over the prior year. Note: The deadline to apply for a PPP loan is June 30, 2020 and you cannot apply for PPP loans on the SBA website.

REALTORS® and their families, clients and most Americans with incomes below the thresholds will receive cash payments from the federal government in the amount of $1,200 per adult plus $500 for each child under the age of seventeen. These payments should be sent out starting in April.

REALTORS® with retirement accounts, including IRAs, can take early withdrawals of up to $100,000 from those accounts without having to pay the 10% early-withdrawal penalty. Those who withdraw such funds can recontribute them to the plan over three years or can keep the money and pay the tax on the withdrawals over a three-year period.